Bid Analysis

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What is Bid Analysis?

Bid analysis is the process of evaluating bids in response to sourcing events. It is performed based on the cost analysis, wherein the bids submitted by all suppliers are compared and awarded to the most eligible bidder (supplier). 

Importance of Bid Analysis 

First, let's understand the criteria for bid analysis. It should always be aligned with the business's objectives. Further, the bid proposals should be designed in sync with the pain point and solution offered by the supplier. 

Remember, the pre-bid supplier questions influence a successful bid. It also depends on the creation (design) of a successful bid proposal document. Here, the cost analysis is influenced by 

  • Cost
  • Responses
  • Scores

Understanding Bid Analysis

Bid analysis can happen anytime during the strategic sourcing processes. In case of a sealed bid, it is necessary to wait till the end of the event. The analysis considers the lowest price, highest score, cost to display the bid, and similar parameters. 

It is necessary to filter out the identical bid factor that works as a differentiator to expedite the analysis and negotiation process. On completion of the bidding process, the bid is awarded to the most deserving supplier(based on the set parameters). 

Elements of Bid Analysis

The common factors considered in the bid analysis process include:

  • Factors or questions considered along with weightage for final scoring
  • Analysis and collaboration with hidden factors
  • Comments and responses from each bidder
  • Inputs received from Supplier Information 
  • Bid document analysis
  • Multi-round bid document and price analysis

Bid Analysis Process

Bid analysis has four steps to bid management, including 

  • Preliminary evaluation - The team checks the bid document for bid security, signatures, errors, tax, and other regularity actions. After the go-ahead, the bid moves to the next stage of analysis.
  • Bid compliance - It checks whether the proposal meets the technical requirements. It is assessed based on delivery schedules, the scope of work, supplier experience, reviews, and more.
  • Price evaluation - Also known as financial bid evaluation, the primary parameter of consideration here is the cost which includes overhead charges, cost per unit, material cost, and more.
  • Due diligence - Last but not least, the post-qualification stage applies to the winning bid. It is to ascertain the information provided by the bidder is correct. 

Types of Bid Analysis 

Technical Bid Analysis -It focuses on the evaluation of technical document to ascertain if it matches the project's technical requirements, including operational costs, specifications, quality, performance management, compliance check, and more. 

Commercial Bid Analysis - It fetches the most cost-effective bid for the project. Here the criteria of consideration are price analysis, contractual term, delivery timeline, and more. Commercial bid analysis ensures that the costs are adequately mentioned in the bid document. In addition, it determines the extra cost, including a delivery fee, testing, inspection, and insurance charges. 

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